Umurenge SACCOs boosted formal savings in Rwanda

Umurenge SACCOs, in conjunction with the expansion of bank and MFI branches, the introduction of agent banking, and the modernization of financial services such as mobile banking, ATMs and mobile money, have all helped to drive Rwanda’s financial inclusion.

According to the 2016 Finscope survey, about 86% (around 5.1 million individuals) in Rwanda save. This includes all forms of savings. Savings through formal institutions currently stands at 49%, showing an increase of 13% from 36% in 2012.

The uptake in formal savings has been driven by savings at Umurenge SACCO which stand at 27% and mobile money savings at 17%.

Eric Rwigamba, the director general in charge of financial sector development at the Ministry of Finance attributed this achievement to different programmes that government has put in place, including the National Financial Education Programme that contributed significantly to raising the level of financial literacy and savings in the country.

During the 2017 savings week launch this Monday in Kigali, the Minister of Finance and Economic Planning, Claver Gatete observed that savings volume accumulated by individuals, enterprises and governments plays a crucial role in achieving sustainable national economic growth.

“We encourage Rwandans to embrace a savings culture especially long term which will support investment for economic growth in the country resulting into higher productivity and wealth not only to individual and households but also to the country at large” noted Gatete.

Minister Gatete added that if more Rwandans in different fields don’t save the country’s banking system and the whole economy would face different problems.

“The saving by individuals, institutions, and countries is the money that the banks lend out for investment. If people don’t save it means that the banking system will depend on the money they borrow from outside, which is bad because all the money made will go directly outside,” observed Gatete.

The Rwanda Savings Week 2017 Themed “Our savings our wealth” aims to remind and educate the public on the importance of saving and exercising money management decisions that best fit the circumstances of one’s life and the week was dedicated to encouraging Rwandans to embrace savings culture to achieve the sustainable economic growth.

In 2009, the government of Rwanda adopted saving mobilisation strategy and since then, savings increased but has not reached the desired level.

With this strategy, government wants to raise the savings rate from the current 10.2 per cent to 20 per cent of the Growth Domestic Product by 2020 in order to trigger investment of 30 per cent of GDP.

The 2017 savings week activities will be conducted at the institutional level where financial institutions, savings group promoters among other stakeholders will showcase new savings products.